Five questions for Obama’s climate rule

The Environmental Protection Agency on Monday will announce the most aggressive effort yet under President Obama to cut greenhouse gas emissions.

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The controversial regulation, which has become a centerpiece of Obama’s second term, would require existing power plants to cut their carbon dioxide emissions.

The president says the rule is necessary to fight climate change, as the nation’s 1,600 power plants emit about 40 percent of the greenhouse gases in the United States.

Republicans and industry groups warn that mandate will take a heavy toll on the economy and have vowed to fight the regulation every step of the way.

Ultimately, Obama can take action without Congress’s approval, thanks to a Supreme Court ruling that gave the EPA regulatory authority over greenhouse gases.

But while Obama administration leaders have revealed some facts about the rule, there are some major questions that have yet to be answered. Here’s what to look for when the rule is released.

1. How will the EPA determine the cuts?

Obama will likely seek to cut carbon emissions from the power plant sector by about 25 percent, but it remains to be seen what year will be the starting point for calculating them.

The start date is critical, especially in light of a recent report from corporate sustainability group Ceres that found power plants have cut their emissions drastically in recent years.

Carbon dioxide emissions from the nation’s top 100 electricity producers fell 13 percent in 2012 from 2008. Cutting emissions 25 percent from the 2008 baseline would be much easier than using 2012 emissions.

On the other hand, using a more recent baseline would effectively reward states that have not made significant carbon cuts in recent years.

2. How much flexibility will be given to the states?

EPA Administrator Gina McCarthy has repeatedly promised state leaders that they would be afforded a great deal of flexibility in determining how to cut power plant emissions.

The agency says it recognizes that each state has its own unique set of circumstances and power sources, and has said there cannot be a one-size-fits-all approach to cutting emissions.

EPA officials say they will recognize the different circumstances when reviewing the submissions, but at the end of the day, the Clean Air Act requires them to write plans for the states if they are found to be insufficient.

States that rely on coal more than others will probably have higher implementation costs and, therefore, different definitions of flexibility than EPA.

3. How much will it cost?

The projected economic cost of the regulation is becoming a matter of fierce debate between industry groups and the administration.

The Chamber of Commerce this week said the rule could cost $50 billion per year through 2030, a figure that Republican lawmakers have seized on. The rule is projected to cost billions because many high-carbon energy sources like coal are cheaper than low-carbon alternatives.

The Obama administration dismissed the Chamber’s report and noted that the details of the rule were not yet public.

The EPA has labeled the rule “economically significant,” which means it would be required to conduct a full analysis of the costs and benefits. Opponents of the rule will be ready to pounce when the results are released.

4. Will the rule go ‘beyond the fence?’

Observers expect the EPA’s rule will go “beyond the fence” of power plants, meaning states would be allowed to use a credit system to meet the requirements by increasing the use of renewable energy, energy efficiency or other measures.

An approach like that would permit a holistic view of emissions and could permit cap-and-trade systems within states. The EPA could also consider factors "beyond the fence" when they determine how far states should go in cutting emissions.

It could also prove controversial and push the boundaries of the law. The electric utility industry has indicated it might challenge the rule in court if it has such a broad scope, since it isn’t clear the Clear Air Act permits it.

5. What will happen in the courts and in Congress?

The emissions rule will need to survive the courts and Congress in order to take effect.

The EPA and outside groups are nearly certain that someone will bring a lawsuit when the rule becomes final in the summer of 2015. Officials predict the regulation will stand, even if it goes all the way to the Supreme Court.

The rule also faces strong opposition among congressional Republicans and some Democrats who argue it would eliminate thousands of jobs and increase the costs of energy.

Senate Minority Leader Mitch McConnell (R-Ky.) has pledged to introduce legislation to block the rule as soon as soon as it is proposed, but it’s unclear whether he could get the votes he needs in the Senate.